Hi All,

Well, I finally did it. After lots of analysis of what I should or should not do, I finally decided to drop the hammer and going.

As of Friday last week, my corporation was approved by California State. The paperwork is on its way, as is the corporate brokerage paperwork to the DRE.

Definitely a liberating feeling and I look forward to sharing the ups and downs of the process. Here is a quick list of the stuff I had to do to get off the ground (aside from get clients! ):

- Create Corporation
- Order yard and directional signs
- Order brokers license for corporation (licensing fee for state)
- Order business cards
- Arrange for E&O Insurance
- Update info with MLS system
- Buy some lockboxes
- Order thick stock logo'd front and back covers for use with listing presos, etc.


That is really it. If you have a brokers license, that is all that really stands between you and truly being your own boss. Unless you want to pay extra for expediting your corporation formation, let me suggest you get that done ahead of time.

In my case, one of the biggest delays was just worrying about doing it wrong somewhere along the way. It can be a scary thing. I finally just decided to go with what I knew and get it done.

Look forward to working with you folks out there in the future!

R

Robert - thanks for the info. I am working towards my liberation too. Next 6 months I plan to acquire my lockboxes, order my signs and any other things I can get done without a big hit to the funds all at once. I already have my LLC in place, now it is just timing and nerve to jump to the greener grass!

Yes been on my own about a year now.

I love it!

It's kind of like when you were a young guy sitting on the wall wanting to get out there and dance with the ladies.

It took alot of guts but when you did it you felt like you were having the time of you life!

I made the change more gradually using a duel licensing approach. Had my own license as a broker overlapping with my associate broker license at another agency for nearly 3 years, then dropped the associate broker license and been totally on my own a little over 2 years ago. That has been the best change I made since starting in the business over 12 years ago.

I operate as a one person business under my own name; a sole proprietorship with no LLC or corporate organization. I haven't ordered any presentation covers (I think Rebel is right to have done so though, as I expect he will be working with a different type of client base than what I do). I haven't sprung for a web site either; though it has been considered. The advice about your expenses is very true, there are a host of vendors that will want to spend your money for you on a lot of stuff that you really don't need. Having said that I will also say don't cheat yourself on what you do need.

Rebel: I have read your posts in the past and think you are well qualified. Good luck and much future success!

2 years next week for me. Very liberating and profitable.

Congratulations and Best of Luck

I would add:
update info with local REALTOR Association

and for the next step:
have MLS and Association paperwork ready if you want to bring an agent on board
have independent contractor agreement ready if agent joins
have system in place to monitor agent files

I wish I could do an LLC out here in California. Unfortunately, you cannot have an LLC with a real estate brokerage in this state.

I think for me the delay came most in just not wanting to do a single thing "Wrong". It was the classic paralysis of analysis.

While I had decided a long time ago I wanted to my own office, it was not till I had paid desk fees for a long period with no sales that I finally DECIDED. Once I did, I just sort of fell into a rush to get it done.

Once I did and just started doing what needed doing, I could not help but wonder why I had delayed so long.

Feels good. Still waiting on the final paperwork (should arrive today.... if not,gotta wait till monday) once that arrives and I send off for the corporate brokers license, I will be official.

What is amazing is that it is as if some sort of cosmic switch has been thrown. Just this week I got two serious buyers and a lister (in an area where houses are moving) who contacted me. It would be fantastic to have months of no business only to get a deal or two going within just a few weeks of starting my own company!

Cave Man makes a good point on getting ready to work with contractor/agents. I have what I think is a unique plan for that and I have already been approached by a couple of agents interested in joining me. The plan was to wait till the new year to bring on agents, but if I find some good folks now, it would be nice to be ready to bring them on board smoothly.

R

"I wish I could do an LLC out here in California. Unfortunately, you cannot have an LLC with a real estate brokerage in this state."

said who?

Best of luck and continued success.
Constantine

Are you operating out of your house Rebel or going to have a real office? I operate out of my house and love it. Maybe in CA you can't do that. I just require my agents to have internet and a fax machine is recommended at their homes, but not required if they want to go to kinkos or something. But good luck rebel. You'll like not having the chains around you. Even if you worked for an easy going broker before it will still be better.

ColoBroker or anyone for that matter that can answer: With recruiting agents, have you had problem being that you are strictly home based. I will be opening an office in the next couple months and have been debating about whether to have an actual physical office or not. If I did get a real office, it would be a small space, but still probably cost me $850-1000/mnth. My expectation is that agents will work from home, but didn't know how they would feel about not having a true office space somewhere. Any thoughts?

Congrats Rebel. You have been planning this since I joined the forum! Best of luck to you.

I have just one broker associate and haven't really recruited, but one other person. I don't plan on recruiting, but if some one approaches me about it I have my office policy. My current broker associate likes the arrangement. He lives about 20 miles away from me and services all over including the Denver Metro area where as I don't. So we don't really need a place as of yet.

guys i must ask.

why start your own shop? i am asking 100% out of quoriousity. there is an agent in my office that i work with on occasion for certain deals and i would say that we are the "go to guys" for one another, when we need something. he has been in the business for about 8 years and was contemplating opening up his own shop. he decided against it. his reason was that we pay 250monthly, 190 annual e&o and 195 per transacion(charged to the client) and we keep 100% of our commission.

if we were to open up an office of our own, we would have to pay higher mls e&o and in my state we would have to have a store front as we could not go from the home(wish we could).

as it is now, we have total flexibility to do anything we want within the law, just as if we were at our own shop. the only real difference as i see it for me is that i pay less money to let someone else assume the cost of running the shop.

please give me your reasons as i am sure you have some great reasons for opening you own shop as opposed to being at someone elses.

for example, super, i know that you worked for solid source. you must pay higher fees on your own as opposed to being linked to them.

If I couldn't operate out of my home then I wouldn't open my own place. I would not want to pay rent for an office.

I don't think there are any companies around this area that offer agent programs like you mentioned estatereal.

If there are they are companies run from homes as well. Or located in Denver which is 50 miles away and not part of my local Realtor board. My MLS fees stay the same. My E&O just doubles to about $500. I don't like office meetings and it seems every company in my area has mandatory office meetings. I live outside of town about 10-12 miles so I never liked going to an office for a lousy meeting or something useless like that.

I like to be able to change my rules to meet the client needs. Maybe there are some other companies around that allow this, but I never looked to them.

No annoying fellow realtors in the same office except myself.

I didn't start my own company until I found centralized showings a couple of years ago. Now there are a bunch of showing companies.

The company I was working for before I opened my own place had low monthly fees, but 55/45 splits that would grow with production. (Coldwell Banker franchise) And this company of the larger ones in town was the cheapest to work for. $1000 month (remax). $22,000 a year (Large local brand). $36,000 year (other local brand). With 100% splits.

thanks for the insight! i am always wondering why others make the choices that they make as they could have insight that i do not have. learning why others have moved to the places that they move is something that i take in. I like to always keep all of my options very open because we never know what the future holds.

It's not bad at Solid Source it was about 275 a year for E and O. Fmls was free and Gamls was 17 a month.

Now with my own brokerage my E and O is about 800.00 a year because I carry 1 million to do Reo's for banks.The FMLS has a minimum sales fee of 1,000 a year so if you sell enough property to pay them 1,000 in fees in a year you are good.They bas it on a certain percentage of sales price times .0012 on each transaction.

Gamls you have to pay about 150.00 a month. I don't have any agents and don't really want any. I usually partner up on commercial deals with developers and other commercial brokers.

what made you ecide to go to your own brokerage if you could have donet it at Solid Source for less money? not that i am questioning you, because i have a friend who did kind of the same thing here in my market and loves his move. hte more i learn, the more i think that i might want to do it someday. though i must admit it would be pretty much just me and maybee an agent or 2 at the most (my assistant and buyers agent). i will probably be taking the classes for my brokers this coming winter. to me that is a pretty hefty "designation" <--for lack of better terms. my market has over 59000 licensed agents with only around 3000 holding a broker or associate brokers license. so for me to be able to sell that on listing presentations and in my marketing will be a big plus in my opinion.

I liked the fact that I wouldn't have to be scrambling if something happened to there brokerage. I liked the fact that if they saw something they percieved as too risky I can go for it because it's MY company and I get the last say.I liked the fact that it is my name and phone number on each listing sign and not someone else's.

More money expenses isn't everything. In fact my business has increased since I started my own company. The total control and freedom at the end of the day is priceless.

You cannot have a real estate brokerage in California that is an LLC. In other words, if you want to represent clients as a brokerage, it cannot be an LLC. If you want to buy your OWN properties and own them via an LLC, that is fine.

You can check with California DRE if you like, the info is hidden deep in their website somewhere, calling them is easier. If you're a member of CAR, you can just call their legal helpline.

Place I found that explains Californias laws regarding LLCs and Brokerages:

http://www.lawinc.com/form_an_llc/en_forming_llc_01.html

My decision just made money sense. The desk fees I was paying would more than cover my self employed expenses. So I just got rid of the desk fees. I am now saving about $200 a month that I can now put toward other things.

I am currently just working out of my house, but I am looking at a shared executive suite where you share a secretary, conference room and break room with other suits and just pay about $250 a month. That includes water, power, internet, janitorial, the works. I won't need something like that till I get some agents tho, so they can have a place to make copies, get mail, etc.

I am also a control freak. I like running things and I have what I think is a unique business model that links agent compensation with performance in REAL client centric numbers (days on market, how close sold to list price, etc.) instead of just volume and total sales.

Finally, when you open your own shop, you can have the cash flow from their work supporting the business. You pay a $250 desk fee. Would it not be nice to have a couple of dozen agents paying YOU that $250 desk fee?

R

I am a captive agent for a new home builder in central California. I sit in a model home alone 6 hours a day. I have been at this 9 years since i got my license. I have never sold resale. I have been in sales for 35 years, but only 9 in real estate. I want to get my brokers license and go solo working out of my home office. I was very well known in the community before selling real estate. I also have a large referal base.
I don't know the process of a sale from meet to close other than that of a new home. I don't know what insurance or legal protection i need. My daughter in law has a masters in bussines managment, so she will help me. I'm just tired of no weekends off and missing family events. My living expense in only $2,500/Month. I'm 59, i could retire, but i don't want to. What would you do in my place.

Gallo - Assuming you no longer want to work weekends, you definitely don't want to work with buyers (since the majority of their activity is on evenings & weekends.)

I suggest looking at some Craig Proctor stuff at quantumleapsystem.com Even what he gives away for free will give you some ideas on how to start marketing to sellers.

Good luck!

Thanks Joel. Yes i will work weekends, evenings ,holidays, but i will do it as i live a life for myself. Now i have to be in one spot on weekends from 10 am to 6pm or unitl the last shopper leaves. I have to call for permission to go get a burger. I have the best closing ratio in the company, so they want me on. $150,000 to $200,000 a year is enough for me, but don't want a boss anymore. I just found this site yesterday, i will read daily and ask questions. I need to become familiar with the routines and experiences of varios experienced agents. I will appreciate all advice.

That sounds worse than wearing one of those ankle bracelets; or being on a leash. Here's hoping you can make good an escape !

Congrats. I broke loose two weeks ago. I'm primarily my own client as I do investment type work but would love to get more involved with buyers. I hope this site helps.

My experience is that office talk can lead to sales that otherwise may not happen because of sharing ideas. I would miss that working from home.
Clay Branyon
North Beach Realty
800-274-1105
www.northbeach.com

I found it to be the exact opposite. Too many agents wasted my time chatting about office politics and then the sharing of info went away as the company started to grow. So it was a good time to leave.

The $40,000 a year feemax fees for the wife and I were a good motivator too. Plus the owner used the shared expenses money to build and advertise a website and wanted us to pay a 20% referral fee for leads.

There is nothing wrong with wanting refferal fees from your agents. I can see using the shared expenses as a problem to fuel that though in agents eyes.

At least with me they don't pay unless it closes and I will help them close it because we both have a vested interest to get to the goal.

Unlike the lead resellers who will suck agents dry whether it closes or not. Now if you are a self-starter and want to do your own thing without leads I just give them to someone else in my company.

The reality is even if you show agents how to generate leads many don't want to do it. They are happy paying a 30 to 40 percent refferal and just working with clients. So I show them both ways and let them decide how they want to do business.

My main reason for opening my own brokerage was to have more control over my business.

With my last broker I had to chase them down for signatures, earnest money for closings, and my own commission checks. I did'nt have time for that.

When I left they had the nerve to ask "Why are you leaving?" LOL!

Now my checks are written directly out to my company...It feels great!

That proverbial "straw that broke the camel's back" for me was when my balloon office decided to charge a $295 "transaction management fee" and mandated that the agent would pay if the client didn't.

Since my business even then was almost all REO and REO sellers don't/won't pay these fees, it pushed me to get a broker license and open my own little shop.

Funny thing is, I was the top producer at that office.